IMF wins pledges of $456bn for crisis fund

The International Monetary Fund has expanded its crisis-fighting fund to
$456bn after 12 more countries, including powerful emerging market
countries, pledged funding.

IMF chief Christine Lagarde: 'countries large and small have rallied to our call for action'Photo: EPA

5:59AM BST 19 Jun 2012

In April, the IMF targeted $430bn to deal with the effects of the eurozone crisis on the global economy, with the UK promising $15bn, but only gathered firm commitments of around $360bn when the BRICS countries - Brazil, Russia, India, China and South Africa - held back.

At the G20 summit in Mexico, BRICS leaders said they had "agreed to enhance their own contributions to the IMF" by $95.5bn.

The money came with a warning that things had to change at the Fund, long dominated by the now troubled economic powers of Europe and the United States, which is not contributing despite its huge voting power on the IMF board.

While Washington has insisted Europe has enough resources to resolve its problems itself, it is also clear that the deeply divided Congress is in no mood, given the US economic problems, to contribute rescue funds for others.

The IMF chief said in a statement on Tuesday: "Countries large and small have rallied to our call for action, and more may join. I salute them and their commitment to multilateralism. As a result, total pledges have risen to $456bn, almost doubling our lending capacity.

"With today's announcements by an additional 12 countries, a total of 37 IMF member countries... have joined this collective effort, demonstrating the broad commitment of the membership to ensure the IMF has access to adequate resources to carry out its mandate in the interests of global financial stability."

The $456bn is still below the $500bn the fund's own economists had said would be an adequate expansion of its crisis intervention funding, given the potential of more contagion in the troubled eurozone.